Wal-Martís impact on Indiaís suppliersand small businessesWal-Mart is the largest private employer inthe United States with 1.3 millionemployees and is moving to dominateretail sectors in other countries includingMexico, Canada, and Brazil. Wal-Martíssize gives it power to drive down costs inthe retail and manufacturing sectors and toignore and even attack the rights ofworkers. Workers and unions, smallbusinesses, environmental organizations,investors, and political and religiousleaders in the U.S. and around the worldhave condemned Wal-Martís refusal totreat workers and communities withdignity. These institutions have producednumerous reports documenting Wal-Martísabuses, many of them focusing on thedestruction of small businesses and jobs,and the washing away of local productionby Wal-Martís flood of Chinese-madegoods.While total imports to India from allcountries has risen by 56% in the last fiveyears, imports of Chinese-made goods toIndia has jumped by more than 200% inthe same period.1 In 2003 alone, Chineseimports to India grew by 45%, but Indianmanufacturing production grew by only6.9%.2Wal-Mart emphasizes the amount that itsources from India, as a reason it should be1 Government of India, Ministry of Commerce andIndustry

2 World Bank,

allowed to build stores. However, theamount that Wal-Mart actually sourcesfrom India is tiny when compared to Wal-Martís sourcing operations in China.Additionally, manufacturing work for Wal-Mart is not reliable because the companymoves production wherever it can find thelowest prices.Wal-Martís entry to the Indian retail sectoris sure to produce a flood of cheapChinese-made goods. Even as Wal-Martwas advertising its ďMade in AmericaĒproducts to American consumers in the1990s, the company was quickly replacingU.S.-made products with Chinese goods.While once sourcing the majority of itsproducts sold in U.S. stores from the U.S.,today up to two-thirds of goods sold inWal-Mart are imported from China.Furthermore, Wal-Mart retail stores wouldhave a negative impact on small businessesin India, and could force many small shopsand traders to close.Wal-Martís Dependence on ChinaWal-Mart emphasizes its contribution toexports in India, yet in 2004 Wal-Martsourced only $1.2 billion worth of goodsfrom India, not even one-fifteenth of theamount Wal-Mart purchased from China inthe same year.3 The total amount thatWal-Mart sources from India every yearamounts to only a little more than a dollarper person in India.4 And, if allowed toopen retail stores, Wal-Mart could upsetthe import balance by importing massivelyfrom China rather than using localproduction.53 Bloomberg, 7/13/054 CIA World Fact Book, India, from 6/30/055 Atimes, 1/31/04,

Wal-Mart misleads customers about thepercentages of goods it buys locally to hideits deep dependence on imports. Forexample, Wal-Mart claims that 80-90% ofgoods sold in their Canada and Mexicostores come from local sources, but thismeans local suppliers or transporters, notjust local producers.6 In fact, Wal-MartCanada has been forced to admit that, ofall the goods Wal-Mart sells in Canada,only half of that 80 percent are madeďentirely in Canada.Ē7Initially, Wal-Mart sourced its productsfrom America. However, the companybegan to pressure its suppliers to producegoods at the lowest price possible, forcingthem to move production overseas,especially to China. In 1995, 6% percentof Wal-Martís total merchandise sold inthe United States was imported.8 Today60% of its total merchandise is importedfrom more than 6,000 suppliers in 63countries, with China at the top of Wal-Martís supplier list.9The Closing of Small BusinessesWal-Mart claims that it does not hurt smallbusinesses, yet in Puerto Rico, between1993 and 2002 some 130 businesses wentbankrupt because of the expansion of largechain stores on the Island, and of those,two-thirds were attributable to the growthand expansion of Wal-Mart.10 Eight LatinAmerican countriesóMexico, PuertoRico, Costa Rica, Argentina, DominicanRepublic, Brazil, Uruguay, and Chileójoined together to condemn the Ďpredatory6 Latin Trade, 08/03 and Canada Newswire10/28/047 Stratford Beacon Herald (Ontario), 6/10/058 Frontline interview with Gary Gereffi9 Morgan Stanley, 03/0410 El Nuevo Dia, 3/21/05 and 9/11/05practicesíĒ of Wal-Mart on a global level.Some wrote laws to prevent the retailerfrom having a high concentration ofbusiness in their countries. For example,in Argentina provincial lawmakers passedlegislation that no business could controlmore than 30 percent of the market in onesector. In Mexico, where Wal-Mart gainedcontrol of more than 50 percent of themarket in less than 10 years, they areevaluating laws to protect domesticbusinesses.11The retail industry in India is already verycrowded. Wal-Martís entry will destroysmall mom-and-pop shops. Indiaís retailsector is already the second largestemployer after agriculture, employingabout 10 percent of the labor force.According to global consultancy firm A.C.Neilson, India had the highest shopdensities in the world. In 2001, it wasestimated that there were 11 outlets forevery 1,000 people.12 Wal-Martís entry toIndia could devastate the small traders andtheir employees.11 Logistics Today,